September 28, 2012


Hi Jennifer,

I was wondering whether a doctor may own equity in a billing company?  Any concern there?

Dr. B


There is no prohibition in NY against a doctor owning a billing company, however, my concern is that if the billing company were not operating appropriately, the doctor would have additional exposure potentially than had the doctor invested in a laundromat instead (depending on potential wrong-doing of course).  My main concern with a doctor owning equity in a billing company is that most billing companies bill on a percentage basis, which is techincally fee-splitting.  A doctor owning an interest in an entity that is fee-splitting would be taking on liability that may extend to his/her license should the involvement and improper arrangement come to light.  The Office of Professional Medical Conduct or Office of Professional Discipline would likely involve themselves in any such review and the percentage basis would potentially result in licensure implications - censure, suspension, revocation, etc.  The ramifications would be potentially greater than for the lay partners.  Additionally, there may be potential kickback prohibitions that may apply in this situation should the doctor be in a position to refer clientele.  Bottom line, if you are feeling entrepreneurial be sure to conduct your due diligence and ensure that any potential venture is compliant.   Be sure to work with counsel.